Acquiring 51% interest in two iron ore projects in the Pilbara, Western Australia

20 September 2019

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Alien Metals Limited (“Alien” or the “Company”), the AIM quoted mineral exploration and development company, is pleased to announce it has entered into a binding option agreement with Windfield Metals Pty Ltd (“Windfield”) to acquire a 51% interest in two exploration licences (the “Licenses”) prospective for Direct Shipping Ore (“DSO”) iron ore in the Pilbara region of Western Australia. Entering into this agreement is a significant step towards the delivery of Alien’s strategy of building a portfolio of mining projects which demonstrate development upside in global jurisdictions with an established infrastructure and mining codes, where strong operational controls can be assured.

Alien is currently exploring for silver and gold in Mexico’s richest silver mining belt, with the option agreement with Windfield allowing Alien to diversify its assets base in a tier one mining jurisdiction. The Company will continue to assess various precious and base metal projects and expand its asset base over the coming year.

Highlights

Dan Smith, Chairman of Alien commented: “This is an extremely exciting opportunity for the Company. Over the last 6 months the Board has been reviewing a range of potential opportunities and these projects are surrounded by major iron ore mines owned by global mining companies and there has already been significant interest in these projects given their prospectivity and resurging iron ore price.

These iron ore licences are in the heart of the most prolific iron ore region in the world, with first class transport links and associated infrastructure. This represents a real opportunity for the Company to unlock shareholder value as iron ore focused companies have delivered significant returns to investors this year. We are excited to commence fieldwork in Q4 2019 and will update the market on our progress in this regard.”

Further Information

The Company has entered into a binding option agreement to acquire a 51% interest in the Licenses prospective for iron ore in the Pilbara region of Western Australia. The binding agreement with Windfield, gives Alien 45 days in which to carry out legal and technical due diligence, and to exercise its option to acquire the interest in the Licenses (the full terms of the transaction are set out below). The Company has engaged expert consultants in Australia, who together with Technical Director Bill Brodie Good, will assist with the technical due diligence and future exploration programs.

Project Summary

Pilbara Iron Ore Projects, Australia

The locations of the iron ore projects within the Pilbara region of Western Australia are set out in figure 1:

Hancock Ranges Iron Ore Project (E47/3954)

The Hancock Ranges Iron Ore Project (E47/3954), is within 20kms of the Newman township and borders licences held by Fortescue Metals Group, Hancock Prospecting, BHP Billiton (Mount Whaleback), Hope Downs and Brockman Mining.

The Licenses have been subject to historical exploration by Rio Tinto plc, BHP Group plc, and more recently Volta Mining Limited (“Volta”). In 2013, Volta undertook reconnaissance mapping and surface rock chip sampling and drilled 4 drill holes for a total of 475m which confirmed an economic strike extension of the Sirius Iron Ore deposit hosted in the Brockman Iron Formation including 126m @ 60.28% Fe from surface (Hole 14SERC004), with surface sampling further along strike supporting the strike extension. This work outlined two areas of potential high-grade iron ore mineralisation: the Sirius Extension Prospect and the Kalgan Prospect. Further information regarding the work carried out by Volta is described in Volta’s announcement dated 27 August 2014, which is currently available from the ASX website.

Figure 2 shows the location of the Sirius Deposit strike extension into the north-eastern part of the Hancock Ranges Iron Ore Project (source: Volta Mining Ltd, 2014):

In the north-western area of the tenement, historic exploration has identified mineralisation at surface in the Kalgan prospect, with Volta having reported in their 2013 annual report, eight rock chip samples containing up to 68.7% Fe in the prospect area.

Surface sample results from the Kalgan prospect in the Hancock Ranges Iron Ore Project are set out in Figure 3 (source: Volta’s announcement dated 27 August 2014, which is currently available from the ASX website):

Brockman Iron Ore Project, E47/3953

This tenement hosts part of the historic BHP Deposit 20 iron ore target and the historic BHP Deposit 19 Fe target sits on the south-eastern boundary.

This tenement is dominated by the Brockman Iron Formation which underlies the majority of the tenement area. Recent alluvial cover is prevalent and covers the indicated Brockman Iron Formation.

The Mount Sylvia Formation has been mapped by the Geological Survey of Western Australia (GSWA) in the southern part of the tenement.

Structurally, the tenement is in the northern area which is thought to be relatively undeformed. A northwest trending folding can be inferred from the geology. This may correspond to the Ophthalmian age folds commonly seen in the south eastern part of the Hamersley Iron Province which have proven iron ore resources already defined.

The location of BHP deposits 19 and 20 in relation to the Brockman Project tenement over regional geology is set out in Figure 4: :

BHP, as part of their much larger regional programme, identified these two ‘deposits’ from a combination of mapping and surface rock chip sampling. This sampling was undertaken by BHP at both the 19 and 20 prospects and the samples were analysed for a standard suit of iron ore related elements. The average iron content of four rock-chip samples from prospect 19 was 62.8% Fe and the average for four samples from prospect 20 was 62% Fe (Source:Broken Hill Proprietary Company Limited Australia 1973, Mount Farquhar Project, Non-statutory Report: Final Report for the year ending 31/12/1972, TR70/5556H: WAMEX Report A3796 (obtained from MINDEX, 2019).

BHP reportedly used generalised outcrop dimensions and average grade of rock-chip sampling to calculate the estimated Fe tonnage per vertical feet.

This tenement remains under explored for iron mineralisation, despite being held by numerous companies over a long period of time. More detailed mapping has been recommended as a priority to determine if any structural complexities in the way of steep folding and/or faulting occurs anywhere on the tenement. Should the mapping confirm the currently identified area of steep folding/mineralisation and/or identify other areas of structural complexity or mineralisation in the Brockman Iron Formation, a broad Reverse Circulation (“RC”) drilling programme will be considered.

The underlying geological units also have the potential to host anomalous iron ore deposits, as reported by BHP.

Transaction Terms

The key terms of the binding term sheet are as follows:

Additionally, following the exercise of the option, Alien would be required to maintain the Licenses in good standing and sole-fund the first two years of minimum commitments, estimated at A$45,000; thereafter, the parties will fund pro-rata to their respective interests.

The upfront Consideration Shares will be subject to a 6-month lock in period.

2019 Alien Work Programme

Alien’s technical consultants, will carry out a site visit to the Hancock Ranges and Brockman projects in September/October 2019 to confirm geological interpretation, project access, and provisionally visit and sample iron-mineralised outcrops, as part of the technical due diligence. Results will be released to the market as and when available.

In the event the findings from the legal and technical due diligence are acceptable to Alien, it is intended that the option would be exercised and an initial work stream be commenced to carry out detailed surface mapping and sampling on each of the projects to close in and inform the next stage of exploration planning including drill target definition.

For further information please visit the Company’s website at www.alienmetals.uk, or contact:

Alien Metals Limited Bill Brodie Good, Technical Director David Taylor, Company Secretary
Tel: +44 (0)20 7887 6599
Yellow Jersey PR Limited Felicity Winkles/Annabel Atkins Tel: +44 (0)774 884 3871
Beaumont Cornish Limited (Nomad) James Biddle/ Roland Cornish www.beaumontcornish.com Tel: +44 (0) 207 628 3396 First Equity Limited (Broker) Jason Robertson Tel +44 (0)20 7374 2212

Notes to Editors

Alien Metals Ltd is an AIM quoted mining exploration and development company. Since the recomposition of the Board and company name change in 2018, Alien has focused on delivering its strategy of acquiring mining projects which demonstrate significant development upside, in jurisdictions with established infrastructure and mining codes, and where strong operational controls can be assured.

In addition to progressing its acquisition-led strategy, following the strategic review of its portfolio of projects in Mexico during 2018-19, the Company has identified exploration targets across its 12 mining concessions in Zacatecas, Mexico, which it is working to advance systematically.

Historical drilling results

Drill-hole locations at the Hancock Ranges Project (E47/3954) and significant Iron Ore interceptions is set out in the table below (source: Volta Mining, 2014)

SiteID East North RL Collar Azimuth Collar Dip Total Depth (metres) Downhole Intersection Depths (metre) Width (metres) Fe% SiO2% Al2O3% P% S% TiO2 LOI Total%
From To
14SERC001 779696 7429736 582 180 -60 72 0 14 14 60.93 2.99 3.41 0.157 0.007 0.127 5.33
14SERC002 779700 7429755 581 0 -90 151 2 128 126 60.28 4.34 3.94 0.162 0.006 0.133 4.63
14SERC003 779703 7429778 583 360 -70 126 0 30 30 63.99 1.68 2.22 0.183 0.032 0.083 3.42
14SERC003 779703 7429778 583 34 38 4 56.32 10.39 4.17 0.174 0.003 0.121 4.42
14SERC004 779694 7429741 582 360 -55 126 0 54 54 60.25 2.32 4.49 0.190 0.006 0.144 5.65
14SERC004 779694 7429741 582 76 84 8 59.96 5.94 3.00 0.191 0.002 0.121 4.59

Competent Person Declaration

The information in this release that relates to exploration results has been reviewed by Mr Howard Baker, an independent technical consultant to the Company. Mr Baker is a Chartered Professional Fellow of the Australasian Institute of Mining and Metallurgy (Membership Number 224239) and a Competent Person as defined by the rules of International Reporting Codes that are aligned with CRIRSCO. Howard Baker has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration targets, Exploration Results, Mineral Resources and Ore Reserves’, also known as the JORC Code. The JORC code is a national reporting organisation that is aligned with CRIRSCO. Howard Baker consents to the inclusion in the announcement of the matters based on his information in the form and context in which they appear.

Forward-Looking Information

This press release contains certain “forward-looking information”. All statements, other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are deemed forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company as well as certain assumptions, including the availability of sufficient funds. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realised or substantially realised, there can be no assurance that they will have the expected consequences to, or effects on the Company.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

For further information please contact:

Alien Metals Limited
Bill Brodie Good, Technical Director
David Taylor, Company Secretary
Tel: +44 (0)20 7887 6599
Yellow Jersey PR Limited Felicity
Winkles/Annabel Atkins
Tel: +44 (0)774 884 3871
Beaumont Cornish Limited (Nomad)
James Biddle/ Roland Cornish
www.beaumontcornish.com
Tel: +44 (0) 207 628 3396
First Equity Limited (Broker)
Jason Robertson
Tel +44 (0)20 7374 2212